Burgan Bank eyes Egypt for potential assets

Kuwait, April 8, 2013

Kuwait-based Burgan Bank is looking at potential acquisitions in Egypt to step up international expansion and is not put off by the country's uncertain political situation.

"We are looking at Egypt and other countries," Majed Essa Al-Ajeel, the bank's chairman, said at a conference in Kuwait.

"We are watching, although we haven't made any decisions. But we think some opportunities might arise out of the situation," Ajeel said.

Egypt has potential acquisition targets in the financial sector because many European banks, which expanded in the fast-growing Middle East and North African markets before the financial crisis, are now looking to sell.

French banks Societe Generale and larger rival BNP Paribas already agreed to sell their banking arms in Egypt to Qatar National Bank and Dubai's Emirates NBD respectively in 2012.

Credit Agricole has a stake in Credit Agricole Egypt and Italy's Intesa Sanpaolo has a 70 percent stake in Bank of Alexandria although neither are "for sale."

"It's always a combination of things which drive us to go outside," Ajeel said. "The lack of opportunities domestically, as of now, like the development plan is not forthcoming."

A 30 billion dinar ($105.2 billion) infrastructure and economic development plan in Kuwait, announced in late 2010, has been delayed. Bank lending growth to the private sector dropped to a 13-month low of 3 percent year-on-year in February, according to central bank data.

Burgan Bank has already expanded beyond Kuwait with the $355 million purchase last year of 70 percent of the Turkish arm of Greece's EFG Eurobank. It will buy the remaining 29.26 percent stake from Tekfen Holding.

The bank is also planning to buy a 25 percent stake in Malta-based trade finance specialist Fimbank.

Burgan shares, which have risen 7 percent year-to-date, were trading down 1.9 percent on the Kuwait bourse Monday as at 1050 GMT. – Reuters